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Climate Vulnerability Promote More Green Investment?

Author

Listed:
  • Sen Zhang
  • Chun-Ping Chang

    (Shih Chien University)

  • Donny Fajar Anugrah

    (Bank Indonesia)

  • Yoga Affandi

    (Bank Indonesia)

Abstract

We find that climate vulnerability reduces green investment in both climate change mitigation and climate change adaptation technologies. This finding holds up under a series of robustness tests and after taking into consideration the time lag effect, cross-sectional dependence, and endogenous problems. We further present that it is socioeconomic-related climate vulnerability that hinders green investment, whereas physical vulnerability does the opposite. Analyses of moderating channels show that the negative impact of climate vulnerability on green investment is more pronounced in countries with lower levels of adaptation readiness, economic development, and technical innovation.

Suggested Citation

  • Sen Zhang & Chun-Ping Chang & Donny Fajar Anugrah & Yoga Affandi, 2022. "Climate Vulnerability Promote More Green Investment?," Working Papers WP/12/2022, Bank Indonesia.
    • Handle: RePEc:idn:wpaper:wp122022
    as

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    References listed on IDEAS

    as
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    3. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    4. Chen, Yin-E & Li, Chunyan & Chang, Chun-Ping & Zheng, Mingbo, 2021. "Identifying the influence of natural disasters on technological innovation," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 22-36.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate vulnerability; green investment; green technologies; physical vulnerability;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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